82_FR_57125 82 FR 56895 - Maritime Security Program

82 FR 56895 - Maritime Security Program

DEPARTMENT OF TRANSPORTATION
Maritime Administration

Federal Register Volume 82, Issue 230 (December 1, 2017)

Page Range56895-56899
FR Document2017-25898

The Maritime Administration (``MARAD'') is amending its regulations to implement amendments to the Maritime Security Act of 2003 by the National Defense Authorization Act for Fiscal Year 2013 (``NDAA 2013''), the Consolidated Appropriations Act, 2016 (``CAA 2016''), and the National Defense Authorization Act for Fiscal Year 2016 (``NDAA 2016''). The revisions to the regulations, among other things, make changes to vessel eligibility for participation in the Maritime Security Program (``MSP''), authorize the extension of current MSP Operating Agreements, amend the procedures for the award of new MSP Operating Agreements, extend the MSP through 2025, update the MSP Operating Agreement payments and schedule of payments, and eliminate the Maintenance and Repair Pilot Program.

Federal Register, Volume 82 Issue 230 (Friday, December 1, 2017)
[Federal Register Volume 82, Number 230 (Friday, December 1, 2017)]
[Rules and Regulations]
[Pages 56895-56899]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-25898]


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DEPARTMENT OF TRANSPORTATION

Maritime Administration

46 CFR Part 296

RIN 2133-AB85


Maritime Security Program

AGENCY: Maritime Administration, Department of Transportation.

ACTION: Final rule.

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SUMMARY: The Maritime Administration (``MARAD'') is amending its 
regulations to implement amendments to the Maritime Security Act of 
2003 by the National Defense Authorization Act for Fiscal Year 2013 
(``NDAA 2013''), the Consolidated Appropriations Act, 2016 (``CAA 
2016''), and the National Defense Authorization Act for Fiscal Year 
2016 (``NDAA 2016''). The revisions to the regulations, among other 
things, make changes to vessel eligibility for participation in the 
Maritime Security Program (``MSP''), authorize the extension of current 
MSP Operating Agreements, amend the procedures for the award of new MSP 
Operating Agreements, extend the MSP through 2025, update the MSP 
Operating Agreement payments and schedule of payments, and eliminate 
the Maintenance and Repair Pilot Program.

DATES: This final rule becomes effective on January 2, 2018.

FOR FURTHER INFORMATION CONTACT: William G. McDonald, Director, Office 
of Sealift Support, U.S. Department of Transportation, Maritime 
Administration, 1200 New Jersey Avenue SE., Washington, DC 20590. 
Telephone (202) 366-0688; Fax (202) 366-5904, electronic mail to 
[email protected].

SUPPLEMENTARY INFORMATION: 

Background

    Section 3508 of the NDAA 2013 authorized the extension of the 
Maritime Security Program through fiscal year 2025. Under section 3508, 
the Secretary of Transportation, acting through the Maritime 
Administrator, is authorized to offer to extend the existing 60 MSP 
Operating Agreements through fiscal year 2025. Section 3508 authorized 
a new payment schedule of increasing MSP Operating Agreement payments 
through fiscal year 2025. These payment amounts were subsequently 
updated by the CAA 2016 and the NDAA 2016. Section 3508 of the NDAA 
2013 also provided a new procedure for awarding MSP Operating 
Agreements, including a new priority system for the award of operating 
agreements. Under the new priority, award will be first based on vessel 
type as determined by military requirements and then based on the 
citizenship status of the applicant. Section 3508 revised the procedure 
for the transfer of MSP Operating Agreements by eliminating the 
requirement to first offer an MSP Operating Agreement to a U.S. Citizen 
under 46 U.S.C. 50501. In addition, Section 3508 eliminated the 
procedure for early termination of MSP Operating Agreements based on 
the availability of replacement vessels. Section 3508 also eliminated 
the eligibility of Lighter Aboard Ship (LASH) vessels to participate in 
the MSP Fleet as a stand-alone category of vessel. The rule eliminates 
the Maintenance and Repair Pilot Program, which has sunset and was not 
extended by the NDAA 2013. The rule also updates MARAD's address for 
the purposes of submitting required reports and vouchers.

Rulemaking Analysis and Notices

    Executive Orders 12866 (Regulatory Planning and Review), 13563 
(Improving Regulation and Regulatory Review) and DOT Regulatory 
Policies and Procedures. Under E.O. 12866 (58 FR 51735, October 4, 
1993), supplemented by E.O. 13563 (76 FR 3821, January 18, 2011) and 
DOT policies and procedures, MARAD must determine whether a regulatory 
action is ``significant'' and, therefore, subject to Office of 
Management and Budget (OMB) review and the requirements of the E.O.s. 
The Orders define ``significant regulatory action'' as one likely to 
result in a rule that may: (1) Have an annual effect on the economy of 
$100 million or more or adversely affect in a material way the economy, 
a sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or tribal 
government or communities; (2) create a serious inconsistency or 
otherwise interfere with an action taken or planned by another Agency; 
(3) materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; and (4) raise novel legal or policy issues arising out of 
legal mandates, the President's priorities, or the principles set forth 
in the E.O.s.
    A determination has been made that this rulemaking is not 
considered a significant regulatory action under section 3(f) of 
Executive Order 12866. This rulemaking will not result in an annual 
effect on the economy of $100 million or more. It is also not 
considered a major rule for purposes of Congressional review under 
Public Law 104-121. This rulemaking is also not significant under the 
Regulatory Policies and Procedures of the Department of Transportation 
(44 FR 11034, February 26, 1979). The costs and overall economic impact 
of this rulemaking do not require further analysis because the 
rulemaking will create no additional costs or new substantive burdens 
to participants in or applicants to the existing program as it 
addresses only new processing procedures.

Executive Order 13771 (Reducing Regulation and Controlling Regulatory 
Costs)

    This rule is not an E.O. 13771 regulatory action because this rule 
is not significant under E.O. 12866.

[[Page 56896]]

Executive Order 13132 (Federalism)

    This rulemaking was analyzed in accordance with the principles and 
criteria contained in Executive Order 13132 (``Federalism''), and it 
has been determined that it does not have sufficient Federalism 
implications to warrant the preparation of a Federalism summary impact 
statement. The revisions to the regulations, among other things, make 
changes to vessel eligibility for participation in the MSP, authorize 
the extension of current MSP Operating Agreements, amend the procedures 
for the award of new MSP Operating Agreements, update the MSP Operating 
Agreement payments and schedule of payments, and eliminate the 
Maintenance and Repair Pilot Program. This rulemaking has no 
substantial effect on the States, or on the current Federal-State 
relationship, or on the current distribution of power and 
responsibilities among the various local officials. Nothing in this 
document preempts any State law or regulation. Therefore, MARAD did not 
consult with State and local officials because it was not necessary.

Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 requires MARAD to assess 
whether this rulemaking would have a significant economic impact on a 
substantial number of small entities and to minimize any adverse 
impact. MARAD certifies that this rulemaking will not have a 
significant economic impact on a substantial number of small entities 
because MSP participants (13 in total) and applicants (11 in the most 
recent solicitation for applications) do not constitute a substantial 
number of small entities.

Executive Order 13211 (Energy Supply, Distribution, or Use)

    MARAD has determined that this rulemaking will not significantly 
affect energy supply, distribution, or use. Therefore, no Statement of 
Energy Effects is required.

Executive Order 12630 (Taking of Private Property)

    This rulemaking will not effect a taking of private property or 
otherwise have taking implications under Executive Order 12630, 
Governmental Actions and Interference with Constitutionally Protected 
Property Rights.

International Trade Impact Assessment

    This rulemaking does not contain standards-related activities that 
create unnecessary obstacles to the foreign commerce of the United 
States.

Privacy Impact Assessment

    Section 522(a)(5) of the Transportation, Treasury, Independent 
Agencies, and General Government Appropriations Act, 2005 (Pub. L. 108-
447, div. H, 118 Stat. 2809 at 3268) requires the Department of 
Transportation and certain other Federal agencies to conduct a privacy 
impact assessment of each proposed rule that will affect the privacy of 
individuals. Claims submitted under this rule will be treated the same 
as all legal claims received by MARAD. The processing and treatment of 
any claim within the scope of this rulemaking by MARAD shall comply 
with all legal, regulatory and policy requirements regarding privacy.

Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 requires Agencies to 
evaluate whether an Agency action would result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $156 million or more (as adjusted for inflation) in 
any 1 year, and if so, to take steps to minimize these unfunded 
mandates. This rulemaking will not impose unfunded mandates under the 
Unfunded Mandates Reform Act of 1995. It will not result in costs of 
$156 million or more to either State, local, or tribal governments, in 
the aggregate, or to the private sector, and is the least burdensome 
alternative that achieves the objectives of the rule.

Regulation Identifier Number (RIN)

    A regulation identifier number (RIN) is assigned to each regulatory 
action listed in the Unified Agenda of Federal Regulations. The 
Regulatory Information Service Center publishes the Unified Agenda in 
April and October of each year. The RIN contained in the heading of 
this document can be used to cross-reference this action with the 
Unified Agenda.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et 
seq.), Federal agencies must obtain approval from OMB for each 
collection of information they conduct, sponsor, or require through 
regulations. This rulemaking updates the regulations due to amendments 
to the Maritime Security Act. This rulemaking contains no new or 
amended information collection or recordkeeping requirements that have 
been approved or require approval by OMB.

Comments on the Proposed Rule

    In response to the agency's Federal Register document published on 
August 5, 2015 (80 FR 46527) seeking public comment on its proposed 
revisions to 46 CFR part 296, a total of five separate comment 
submissions were made by or on behalf of the following entities: APL 
Marine Services, Ltd. and its affiliated companies (``APL''), American 
Roll-on Roll-off Carrier Group Inc. (``ARC Group''), Schuyler Line 
Navigation Company, LLC, Liberty Global Logistics LLC, and the 
Transportation Trades Department, AFL-CIO (``TTD''). The agency 
responds below to all comments.
    One commenter noted that 46 CFR 296.30(h)(2) of the existing 
regulations was omitted from the proposed rulemaking and should be 
retained in a final rule. We agree. The NDAA 2013 did not eliminate the 
provision permitting an owner or operator of an MSP vessel to transfer 
and register such a vessel under an acceptable foreign registry in the 
event sufficient funds are not appropriated for any fiscal year by the 
60th day of that fiscal year. The text of 46 CFR 296.30(h)(2) is 
retained in the final rule.
    The commenter also noted that the definition of Foreign Commerce 
unduly omitted certain services that were not affected by the NDAA 
2013. We agree. While excluding from the definition of Foreign Commerce 
certain bulk carrying services, the NDAA 2013 did not otherwise 
substantively change the definition of Foreign Commerce. The proposed 
definition unnecessarily eliminated currently MSP-eligible services. 
Therefore, these existing services are retained in the final rule. The 
commenter also recommended amending 46 CFR 296.31(d)(2), to make that 
section more consistent with the text of 46 U.S.C. 53105(a) and the 
regulatory definition of Foreign Commerce of 46 CFR 296.2. We agree 
that 46 CFR 296.31(d)(2), as currently drafted, is inconsistent with 46 
U.S.C. 53105(a) with its use of ``foreign trade,'' an undefined term, 
instead of ``foreign commerce'' and thus may invite confusion. 
Accordingly, we are amending 46 CFR 296.31(d)(2) by replacing ``foreign 
trade'' with ``foreign commerce'' and retaining reference to the 
registry endorsement requirement.
    Three commenters recommended increasing annual payments under the 
MSP. Two recommended an annual payment of $5 million per vessel 
starting in fiscal year 2017. MSP payment amounts are established by 
statute. MARAD cannot adjust annual payment amounts without a 
corresponding legislative authorization.

[[Page 56897]]

Nevertheless, the increased payments authorized by the NDAA 2016 and 
CAA 2016 are included in the final rule.
    Two commenters critiqued MARAD's administration of the MSP and made 
recommendations that would require significant amendments to our 
regulations. These recommendations are beyond the scope of the current 
rulemaking implementing the NDAA 2013, but will be considered in the 
event of a future rulemaking.

List of Subjects in 46 CFR Part 296

    Assistance payments, Maritime carriers, Reporting and recordkeeping 
requirements.

    For the reasons set out in the preamble, the Maritime 
Administration amends 46 CFR part 296 as follows:

PART 296--MARITIME SECURITY PROGRAM (MSP)

0
1. The authority citation for part 296 is revised to read as follows:

    Authority:  Pub. L. 108-136, Pub. L. 109-163, Pub. L. 112-239; 
49 U.S.C. 322(a), 46 U.S.C. chapter 531, 49 CFR 1.93.


0
2. Amend Sec.  296.2 by:
0
a. Revising the definitions of Foreign Commerce, MSA 2003, 
Participating Fleet Vessel, and Section 2 Citizen; and
0
b. Removing the definition of Lash Vessel.
    The revisions to read as follows:


Sec.  296.2   Definitions.

* * * * *
    Foreign Commerce means a cargo freight service, including direct 
and relay service, operated exclusively in the foreign trade or in 
mixed foreign and domestic trade allowed under a registry endorsement 
under 46 U.S.C. 12111 where the origination point or the destination 
point of any cargo carried is the United States, regardless of whether 
the vessel provides direct service between the United States and a 
foreign country, or commerce or trade between foreign countries.
* * * * *
    MSA 2003 means the Maritime Security Act of 2003, as amended.
* * * * *
    Participating Fleet Vessel means a vessel that--
    (1) On October 1, 2015--
    (i) Meets the requirements of paragraph (1), (2), (3), or (4) of 
section 53102(c) of the MSA; and
    (ii) Is less than 20 years of age if the vessel is a tank vessel, 
or is less than 25 years of age for all other vessel types; and
    (2) on December 31, 2014, is covered by an MSP Operating Agreement 
under 46 U.S.C. chapter 531.
* * * * *
    Section 2 Citizen means a United States citizen within the meaning 
of 46 U.S.C. 50501, without regard to any statute that ``deems'' a 
vessel to be owned and operated by a United States citizen within the 
meaning of 46 U.S.C. 50501.
* * * * *

0
3. Amend Sec.  296.11 by revising paragraph (a)(3) to read as follows:


Sec.  296.11   Vessel requirements.

    (a) * * *
    (3) The vessel is self-propelled and--
    (i) Is a tank vessel that is 10 years of age or less on the date 
the vessel is included in the Fleet; or
    (ii) Is any other type of vessel that is 15 years of age or less on 
the date the vessel is included in the Fleet;
* * * * *


Sec. Sec.  296.21, 296.22, 296.23   [Removed and reserved]

0
4. Remove and reserve Sec. Sec.  296.21 through 296.23.

0
5. Revise Sec.  296.24 to read as follows:


Sec.  296.24   Subsequent awards of MSP Operating Agreements.

    (a) MARAD intends to ensure that all available MSP Operating 
Agreements are fully utilized at all times in order to maximize the 
benefit of the MSP. Accordingly, when an MSP Operating Agreement 
becomes available through termination by the Secretary or early 
termination by the MSP contractor, and no transfer under 46 U.S.C. 
53105(e) is involved, MARAD will reissue the MSP Operating Agreement 
pursuant to the following criteria:
    (1) The proposed vessel shall meet the requirements for vessel 
eligibility in 46 U.S.C. 53102(b);
    (2) The applicant shall meet the vessel ownership and operating 
requirements for priority in 46 U.S.C. 53102(c); and
    (3) Priority will be assigned on the basis of vessel type 
established by military requirements specified by the Secretary of 
Defense. After consideration of military requirements, priority shall 
be given to an applicant that is a United States citizen under section 
50501 of this title.
    (b) MARAD shall allow an applicant at least 30 days to submit an 
application for a new MSP Operating Agreement.
    (c) MARAD and USTRANSCOM will determine if the applications 
received form an adequate pool for award of a reissued MSP Operating 
Agreement. If so, MARAD will award a reissued MSP Operating Agreement 
from that pool of qualified applicants in its discretion according to 
the procedures of paragraph (a) of this section, subject to approval of 
the Secretary of Defense. MARAD and USTRANSCOM may decide to open a new 
round of applications. MARAD shall provide written reasons for denying 
applications. In as much as MSP furthers a public purpose and MARAD 
does not acquire goods or services through MSP, the selection process 
for award of MSP Operating Agreements does not constitute an 
acquisition process subject to any procurement law or the Federal 
Acquisition Regulations.

0
6. Revise Sec.  296.30 to read as follows:


Sec.  296.30   General conditions.

    (a) Approval. The Secretary, in conjunction with the Secretary of 
Defense, may approve applications to enter into a MSP Operating 
Agreement and make MSP Payments with respect to vessels that are 
determined by the Secretary to be commercially viable and deemed by the 
Secretary of Defense to be militarily useful for meeting the sealift 
needs of the United States in time of war or national emergencies. The 
Secretary announced an initial award of 60 MSP Operating Agreements on 
January 12, 2005. In June 2014, the Secretary extended the term of all 
60 MSP Operating Agreements through FY 2025.
    (b) Effective date--(1) General rule. Unless otherwise provided, 
the effective date of an MSP Operating Agreement is October 1, 2005.
    (2) Exceptions. In the case of an Eligible Vessel to be included in 
an MSP Operating Agreement that is on charter to the U.S. Government, 
other than a charter under the provisions of an Emergency Preparedness 
Agreement (EPA) provided by 46 U.S.C. 53107, as amended, unless an 
earlier date is requested by the applicant, the effective date for an 
MSP Operating Agreement shall be:
    (i) The expiration or termination date of the Government charter 
covering the vessel; or
    (ii) Any earlier date on which the vessel is withdrawn from that 
charter, but not before October 1, 2005.
    (c) Replacement vessels. A Contractor may replace an MSP vessel 
under an MSP Operating Agreement with another vessel that is eligible 
to be included in the MSP under section 296.11(a), if the Secretary, in 
conjunction with the Secretary of Defense, approves the replacement 
vessel.
    (d) Termination by the Secretary. If the Contractor materially 
fails to comply

[[Page 56898]]

with the terms of the MSP Operating Agreement:
    (1) The Secretary shall notify the Contractor and provide a 
reasonable opportunity for the Contractor to comply with the MSP 
Operating Agreement;
    (2) The Secretary shall terminate the MSP Operating Agreement if 
the Contractor fails to achieve such compliance; and
    (3) Upon such termination, any funds obligated by the relevant MSP 
Operating Agreement shall be available to the Secretary to carry out 
the MSP.
    (e) Early termination by Contractor, generally. An MSP Operating 
Agreement shall terminate on a date specified by the Contractor if the 
Contractor notifies the Secretary not later than 60 days before the 
effective date of the proposed termination that the Contractor intends 
to terminate the MSP Operating Agreement. The Contractor shall be bound 
by the provisions relating to vessel documentation and national 
security commitments, and by its EPA for the full term, from October 1, 
2005, through September 30, 2025, of the MSP Operating Agreement.
    (f) [Reserved]
    (g) Non-renewal for lack of funds. If, by the first day of a fiscal 
year, sufficient funds have not been appropriated under the authority 
of MSA 2003, as amended, for that fiscal year, the Secretary will 
notify the Senate Committees on Armed Services and Commerce, Science, 
and Transportation, and the House of Representatives Committee on Armed 
Services, that MSP Operating Agreements for which sufficient funds are 
not available will not be renewed for that fiscal year if sufficient 
funds are not appropriated by the 60th day of that fiscal year. If only 
partial funding is appropriated by the 60th day of such fiscal year, 
then the Secretary, in consultation with the Secretary of Defense, 
shall select the vessels to retain under MSP Operating Agreements, 
based on the Secretaries' determinations of the most militarily useful 
and commercially viable vessels. In the event that no funds are 
appropriated, then all MSP Operating Agreements shall be terminated, 
and each Contractor shall be released from its obligations under the 
MSP Operating Agreement. Final payments under the terminated MSP 
Operating Agreements shall be made in accordance with Sec.  296.41. To 
the extent that funds are appropriated in a subsequent fiscal year, 
former MSP Operating Agreements may be reinstated if mutually 
acceptable to the Administrator and the Contractor, provided the MSP 
vessel remains eligible.
    (h) Release of vessels from obligations. If sufficient funds are 
not appropriated for payments under an MSP Operating Agreement for any 
fiscal year by the 60th day of that fiscal year, then--
    (1) Each vessel covered by a terminated MSP Operating Agreement is 
released from any further obligation under the MSP Operating Agreement;
    (2) The owner and operator of a non-tank vessel may transfer and 
register the applicable vessel under foreign registry deemed acceptable 
by the Secretary and the SecDef, notwithstanding 46 U.S.C. chapter 561 
and 46 CFR part 221;
    (3) If section 902 of the Act is applicable to a vessel that has 
been transferred to a foreign registry due to a terminated MSP 
Operating Agreement, then that vessel is available to be requisitioned 
by the Secretary pursuant to section 902 of the Act; and
    (4) Paragraph (h) of this section is not applicable to vessels 
under MSP Operating Agreements that have been terminated for any other 
reason.
    (i) Foreign transfer of vessel. A Contractor may transfer a non-
tank vessel to a foreign registry, without approval of the Secretary, 
if the Secretary, in conjunction with the Secretary of Defense, 
determines that the contractor will provide a replacement vessel:
    (1) Of equal or greater military capability and of a capacity that 
is equivalent or greater as measured in deadweight tons, gross tons, or 
container equivalent units, as appropriate;
    (2) That is a documented vessel under 46 U.S.C. chapter 121 by the 
owner of the vessel to be placed under a foreign registry; and
    (3) That is not more than 10 years of age on the date of that 
documentation.
    (j) Transfer of MSP Operating Agreements. A contractor under an MSP 
Operating Agreement may transfer the agreement (including all rights 
and obligations under the MSP Operating Agreement) to any person that 
is eligible to enter into the MSP Operating Agreement under this 
chapter if the Secretary and the Secretary of Defense determine that 
the transfer is in the best interests of the United States. A 
transaction shall not be considered a transfer of an MSP Operating 
Agreement if the same legal entity with the same vessels remains the 
contracting party under the MSP Operating Agreement.

0
7. Amend Sec.  296.31 by revising paragraphs (a) and (d)(2) to read as 
follows:


Sec.  296.31   MSP assistance conditions.

    (a) Term of MSP Operating Agreement. MSP Operating Agreements are 
authorized for 20 years, starting on October 1, 2005, and ending on 
September 30, 2025, but payments to Contractors are subject to annual 
appropriations each fiscal year. MARAD may enter into MSP Operating 
Agreements for a period less than the full term authorized under the 
MSA 2003, as amended.
* * * * *
    (d) * * *
    (2) Operation: Be operated exclusively in the foreign commerce or 
in mixed foreign commerce and domestic trade allowed under a registry 
endorsement issued under 46 U.S.C. 12111, and shall not otherwise be 
operated in the coastwise trade of the United States; and
* * * * *

0
8. Amend Sec.  296.32 by revising the introductory text to read as 
follows:


Sec.  296.32   Reporting requirements.

    The Contractor shall submit to the Director, Office of Financial 
Approvals, Maritime Administration, 2nd Floor, West Building, 1200 New 
Jersey Ave. SE., Washington, DC 20590, one of the following reports, 
including management footnotes where necessary to make a fair financial 
presentation:
* * * * *

0
9. Revise Sec.  296.40 to read as follows:


Sec.  296.40   Billing procedures.

    Submission of voucher. For contractors operating under more than 
one MSP Operating Agreement, the contractor may submit a single monthly 
voucher applicable to all its MSP Operating Agreements. Each voucher 
submission shall include a certification that the vessel(s) for which 
payment is requested were operated in accordance with Sec.  296.31(d) 
and applicable MSP Operating Agreements with MARAD, and consideration 
shall be given to reductions in amounts payable as set forth in Sec.  
296.41(b) and (c). All submissions shall be forwarded to the Director, 
Office of Accounting, MAR-330, Maritime Administration, 2nd Floor, West 
Building, 1200 New Jersey Ave. SE., Washington, DC 20590. Payments 
shall be paid and processed under the terms and conditions of the 
Prompt Payment Act, 31 U.S.C. 3901.

0
10. Amend Sec.  296.41 by revising paragraph (a) to read as follows:


Sec.  296.41   Payment procedures.

    (a) Amount payable. An MSP Operating Agreement shall provide, 
subject to the availability of appropriations and to the extent the

[[Page 56899]]

MSP Operating Agreement is in effect, for each Agreement Vessel, an 
annual payment equal to $2,600,000 for FY 2006, FY 2007, FY 2008; 
$2,900,000 for FY 2009, FY 2010, FY 2011; $3,100,000 for FY 2012, FY 
2013, FY 2014, and FY 2015; $3,500,000 for FY 2016; $4,999,950 for FY 
2017; $5,000,000 for FY 2018, FY 2019, and FY 2020; $5,233,463 for FY 
2021; and $3,700,000 for FY 2022, FY 2023, FY 2024, and FY 2025. This 
amount shall be paid in equal monthly installments at the end of each 
month. The annual amount payable shall not be reduced except as 
provided in paragraphs (b) and (c) of this section.
* * * * *

Subpart G--[Removed]

0
11. Remove Subpart G, consisting of Sec.  296.60.

    Dated: November 28, 2017.

    By Order of the Maritime Administrator.
T. Mitchell Hudson, Jr.,
Secretary, Maritime Administration.
[FR Doc. 2017-25898 Filed 11-30-17; 8:45 am]
BILLING CODE 4910-81-P



                                                                  Federal Register / Vol. 82, No. 230 / Friday, December 1, 2017 / Rules and Regulations                                         56895

                                                timely withdrawal of this direct final                  Authorization Act for Fiscal Year 2016                The rule also updates MARAD’s address
                                                notice of deletion before the effective                 (‘‘NDAA 2016’’). The revisions to the                 for the purposes of submitting required
                                                date of the deletion, and it will not take              regulations, among other things, make                 reports and vouchers.
                                                effect. EPA will prepare a response to                  changes to vessel eligibility for
                                                comments and continue with the                          participation in the Maritime Security                Rulemaking Analysis and Notices
                                                deletion process on the basis of the                    Program (‘‘MSP’’), authorize the                         Executive Orders 12866 (Regulatory
                                                notice of intent to delete and the                      extension of current MSP Operating                    Planning and Review), 13563
                                                comments already received. There will                   Agreements, amend the procedures for                  (Improving Regulation and Regulatory
                                                be no additional opportunity to                         the award of new MSP Operating                        Review) and DOT Regulatory Policies
                                                comment.                                                Agreements, extend the MSP through
                                                                                                                                                              and Procedures. Under E.O. 12866 (58
                                                                                                        2025, update the MSP Operating
                                                List of Subjects in 40 CFR Part 300                                                                           FR 51735, October 4, 1993),
                                                                                                        Agreement payments and schedule of
                                                  Environmental protection, Air                                                                               supplemented by E.O. 13563 (76 FR
                                                                                                        payments, and eliminate the
                                                pollution control, Chemicals, Hazardous                 Maintenance and Repair Pilot Program.                 3821, January 18, 2011) and DOT
                                                substances, Hazardous waste,                                                                                  policies and procedures, MARAD must
                                                                                                        DATES: This final rule becomes effective
                                                Intergovernmental relations, Penalties,                                                                       determine whether a regulatory action is
                                                                                                        on January 2, 2018.
                                                Reporting and recordkeeping                                                                                   ‘‘significant’’ and, therefore, subject to
                                                                                                        FOR FURTHER INFORMATION CONTACT:
                                                requirements, Superfund, Water                                                                                Office of Management and Budget
                                                                                                        William G. McDonald, Director, Office
                                                pollution control, Water supply.                                                                              (OMB) review and the requirements of
                                                                                                        of Sealift Support, U.S. Department of
                                                                                                                                                              the E.O.s. The Orders define ‘‘significant
                                                  Dated: October 18, 2017.                              Transportation, Maritime
                                                                                                                                                              regulatory action’’ as one likely to result
                                                Deborah Szaro,                                          Administration, 1200 New Jersey
                                                                                                                                                              in a rule that may: (1) Have an annual
                                                Acting Regional Administrator, Region 1.                Avenue SE., Washington, DC 20590.
                                                                                                                                                              effect on the economy of $100 million
                                                  For the reasons set out in this                       Telephone (202) 366–0688; Fax (202)
                                                                                                        366–5904, electronic mail to                          or more or adversely affect in a material
                                                document, 40 CFR part 300 is amended                                                                          way the economy, a sector of the
                                                as follows:                                             William.G.McDonald@dot.gov.
                                                                                                                                                              economy, productivity, competition,
                                                                                                        SUPPLEMENTARY INFORMATION:
                                                                                                                                                              jobs, the environment, public health or
                                                PART 300—NATIONAL OIL AND                               Background                                            safety, or State, local, or tribal
                                                HAZARDOUS SUBSTANCES                                                                                          government or communities; (2) create a
                                                POLLUTION CONTINGENCY PLAN                                 Section 3508 of the NDAA 2013
                                                                                                        authorized the extension of the                       serious inconsistency or otherwise
                                                ■ 1. The authority citation for part 300                Maritime Security Program through                     interfere with an action taken or
                                                continues to read as follows:                           fiscal year 2025. Under section 3508, the             planned by another Agency; (3)
                                                                                                        Secretary of Transportation, acting                   materially alter the budgetary impact of
                                                  Authority: 33 U.S.C. 1321(d); 42 U.S.C.
                                                                                                        through the Maritime Administrator, is                entitlements, grants, user fees, or loan
                                                9601–9657; E.O. 13626, 77 FR 56749, 3 CFR,
                                                2013 Comp., p. 306; E.O. 12777, 56 FR 54757,            authorized to offer to extend the existing            programs or the rights and obligations of
                                                3 CFR, 1991 Comp., p. 351; E.O. 12580, 52               60 MSP Operating Agreements through                   recipients thereof; and (4) raise novel
                                                FR 2923, 3 CFR, 1987 Comp., p. 193.                     fiscal year 2025. Section 3508                        legal or policy issues arising out of legal
                                                                                                        authorized a new payment schedule of                  mandates, the President’s priorities, or
                                                Appendix B to Part 300—[Amended]                                                                              the principles set forth in the E.O.s.
                                                                                                        increasing MSP Operating Agreement
                                                ■  2. Table 1 of appendix B to part 300                 payments through fiscal year 2025.                       A determination has been made that
                                                is amended by removing ‘‘MA’’,                          These payment amounts were                            this rulemaking is not considered a
                                                ‘‘Hatheway and Patterson Company’’,                     subsequently updated by the CAA 2016                  significant regulatory action under
                                                ‘‘Mansfield’’.                                          and the NDAA 2016. Section 3508 of the                section 3(f) of Executive Order 12866.
                                                [FR Doc. 2017–25937 Filed 11–30–17; 8:45 am]            NDAA 2013 also provided a new                         This rulemaking will not result in an
                                                BILLING CODE 6560–50–P
                                                                                                        procedure for awarding MSP Operating                  annual effect on the economy of $100
                                                                                                        Agreements, including a new priority                  million or more. It is also not
                                                                                                        system for the award of operating                     considered a major rule for purposes of
                                                                                                        agreements. Under the new priority,                   Congressional review under Public Law
                                                DEPARTMENT OF TRANSPORTATION
                                                                                                        award will be first based on vessel type              104–121. This rulemaking is also not
                                                Maritime Administration                                 as determined by military requirements                significant under the Regulatory Policies
                                                                                                        and then based on the citizenship status              and Procedures of the Department of
                                                46 CFR Part 296                                         of the applicant. Section 3508 revised                Transportation (44 FR 11034, February
                                                                                                        the procedure for the transfer of MSP
                                                RIN 2133–AB85                                                                                                 26, 1979). The costs and overall
                                                                                                        Operating Agreements by eliminating
                                                                                                                                                              economic impact of this rulemaking do
                                                                                                        the requirement to first offer an MSP
                                                Maritime Security Program                                                                                     not require further analysis because the
                                                                                                        Operating Agreement to a U.S. Citizen
                                                                                                                                                              rulemaking will create no additional
                                                AGENCY:  Maritime Administration,                       under 46 U.S.C. 50501. In addition,
                                                                                                                                                              costs or new substantive burdens to
                                                Department of Transportation.                           Section 3508 eliminated the procedure
                                                                                                        for early termination of MSP Operating                participants in or applicants to the
                                                ACTION: Final rule.                                                                                           existing program as it addresses only
                                                                                                        Agreements based on the availability of
                                                SUMMARY:  The Maritime Administration                   replacement vessels. Section 3508 also                new processing procedures.
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                                                (‘‘MARAD’’) is amending its regulations                 eliminated the eligibility of Lighter                 Executive Order 13771 (Reducing
                                                to implement amendments to the                          Aboard Ship (LASH) vessels to                         Regulation and Controlling Regulatory
                                                Maritime Security Act of 2003 by the                    participate in the MSP Fleet as a stand-              Costs)
                                                National Defense Authorization Act for                  alone category of vessel. The rule
                                                Fiscal Year 2013 (‘‘NDAA 2013’’), the                   eliminates the Maintenance and Repair                   This rule is not an E.O. 13771
                                                Consolidated Appropriations Act, 2016                   Pilot Program, which has sunset and                   regulatory action because this rule is not
                                                (‘‘CAA 2016’’), and the National Defense                was not extended by the NDAA 2013.                    significant under E.O. 12866.


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                                                56896             Federal Register / Vol. 82, No. 230 / Friday, December 1, 2017 / Rules and Regulations

                                                Executive Order 13132 (Federalism)                      Privacy Impact Assessment                             Comments on the Proposed Rule
                                                   This rulemaking was analyzed in                         Section 522(a)(5) of the                              In response to the agency’s Federal
                                                accordance with the principles and                      Transportation, Treasury, Independent                 Register document published on August
                                                criteria contained in Executive Order                                                                         5, 2015 (80 FR 46527) seeking public
                                                                                                        Agencies, and General Government
                                                13132 (‘‘Federalism’’), and it has been                                                                       comment on its proposed revisions to 46
                                                                                                        Appropriations Act, 2005 (Pub. L. 108–
                                                determined that it does not have                                                                              CFR part 296, a total of five separate
                                                                                                        447, div. H, 118 Stat. 2809 at 3268)
                                                sufficient Federalism implications to                                                                         comment submissions were made by or
                                                                                                        requires the Department of
                                                warrant the preparation of a Federalism                                                                       on behalf of the following entities: APL
                                                summary impact statement. The                           Transportation and certain other Federal
                                                                                                                                                              Marine Services, Ltd. and its affiliated
                                                revisions to the regulations, among                     agencies to conduct a privacy impact
                                                                                                                                                              companies (‘‘APL’’), American Roll-on
                                                other things, make changes to vessel                    assessment of each proposed rule that
                                                                                                                                                              Roll-off Carrier Group Inc. (‘‘ARC
                                                eligibility for participation in the MSP,               will affect the privacy of individuals.
                                                                                                                                                              Group’’), Schuyler Line Navigation
                                                authorize the extension of current MSP                  Claims submitted under this rule will be
                                                                                                                                                              Company, LLC, Liberty Global Logistics
                                                Operating Agreements, amend the                         treated the same as all legal claims
                                                                                                                                                              LLC, and the Transportation Trades
                                                procedures for the award of new MSP                     received by MARAD. The processing
                                                                                                                                                              Department, AFL–CIO (‘‘TTD’’). The
                                                Operating Agreements, update the MSP                    and treatment of any claim within the
                                                                                                                                                              agency responds below to all comments.
                                                Operating Agreement payments and                        scope of this rulemaking by MARAD                        One commenter noted that 46 CFR
                                                schedule of payments, and eliminate the                 shall comply with all legal, regulatory               296.30(h)(2) of the existing regulations
                                                Maintenance and Repair Pilot Program.                   and policy requirements regarding                     was omitted from the proposed
                                                This rulemaking has no substantial                      privacy.                                              rulemaking and should be retained in a
                                                effect on the States, or on the current                 Unfunded Mandates Reform Act of 1995                  final rule. We agree. The NDAA 2013
                                                Federal-State relationship, or on the                                                                         did not eliminate the provision
                                                current distribution of power and                          The Unfunded Mandates Reform Act                   permitting an owner or operator of an
                                                responsibilities among the various local                of 1995 requires Agencies to evaluate                 MSP vessel to transfer and register such
                                                officials. Nothing in this document                     whether an Agency action would result                 a vessel under an acceptable foreign
                                                preempts any State law or regulation.                   in the expenditure by State, local, and               registry in the event sufficient funds are
                                                Therefore, MARAD did not consult with                   tribal governments, in the aggregate, or              not appropriated for any fiscal year by
                                                State and local officials because it was                by the private sector, of $156 million or             the 60th day of that fiscal year. The text
                                                not necessary.                                          more (as adjusted for inflation) in any 1             of 46 CFR 296.30(h)(2) is retained in the
                                                Regulatory Flexibility Act                              year, and if so, to take steps to minimize            final rule.
                                                                                                        these unfunded mandates. This                            The commenter also noted that the
                                                   The Regulatory Flexibility Act of 1980                                                                     definition of Foreign Commerce unduly
                                                                                                        rulemaking will not impose unfunded
                                                requires MARAD to assess whether this                                                                         omitted certain services that were not
                                                                                                        mandates under the Unfunded
                                                rulemaking would have a significant                                                                           affected by the NDAA 2013. We agree.
                                                                                                        Mandates Reform Act of 1995. It will
                                                economic impact on a substantial                                                                              While excluding from the definition of
                                                                                                        not result in costs of $156 million or
                                                number of small entities and to                                                                               Foreign Commerce certain bulk carrying
                                                                                                        more to either State, local, or tribal
                                                minimize any adverse impact. MARAD                                                                            services, the NDAA 2013 did not
                                                certifies that this rulemaking will not                 governments, in the aggregate, or to the
                                                                                                        private sector, and is the least                      otherwise substantively change the
                                                have a significant economic impact on                                                                         definition of Foreign Commerce. The
                                                a substantial number of small entities                  burdensome alternative that achieves
                                                                                                        the objectives of the rule.                           proposed definition unnecessarily
                                                because MSP participants (13 in total)                                                                        eliminated currently MSP-eligible
                                                and applicants (11 in the most recent                   Regulation Identifier Number (RIN)                    services. Therefore, these existing
                                                solicitation for applications) do not                                                                         services are retained in the final rule.
                                                constitute a substantial number of small                   A regulation identifier number (RIN)
                                                                                                                                                              The commenter also recommended
                                                entities.                                               is assigned to each regulatory action
                                                                                                                                                              amending 46 CFR 296.31(d)(2), to make
                                                                                                        listed in the Unified Agenda of Federal
                                                Executive Order 13211 (Energy Supply,                                                                         that section more consistent with the
                                                                                                        Regulations. The Regulatory Information
                                                Distribution, or Use)                                                                                         text of 46 U.S.C. 53105(a) and the
                                                                                                        Service Center publishes the Unified
                                                  MARAD has determined that this                                                                              regulatory definition of Foreign
                                                                                                        Agenda in April and October of each
                                                rulemaking will not significantly affect                                                                      Commerce of 46 CFR 296.2. We agree
                                                                                                        year. The RIN contained in the heading
                                                energy supply, distribution, or use.                                                                          that 46 CFR 296.31(d)(2), as currently
                                                                                                        of this document can be used to cross-
                                                Therefore, no Statement of Energy                                                                             drafted, is inconsistent with 46 U.S.C.
                                                                                                        reference this action with the Unified
                                                Effects is required.                                                                                          53105(a) with its use of ‘‘foreign trade,’’
                                                                                                        Agenda.
                                                                                                                                                              an undefined term, instead of ‘‘foreign
                                                Executive Order 12630 (Taking of                        Paperwork Reduction Act                               commerce’’ and thus may invite
                                                Private Property)                                                                                             confusion. Accordingly, we are
                                                  This rulemaking will not effect a                       Under the Paperwork Reduction Act                   amending 46 CFR 296.31(d)(2) by
                                                taking of private property or otherwise                 of 1995 (PRA) (44 U.S.C. 3501 et seq.),               replacing ‘‘foreign trade’’ with ‘‘foreign
                                                have taking implications under                          Federal agencies must obtain approval                 commerce’’ and retaining reference to
                                                Executive Order 12630, Governmental                     from OMB for each collection of                       the registry endorsement requirement.
                                                Actions and Interference with                           information they conduct, sponsor, or                    Three commenters recommended
                                                Constitutionally Protected Property                     require through regulations. This                     increasing annual payments under the
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                                                Rights.                                                 rulemaking updates the regulations due                MSP. Two recommended an annual
                                                                                                        to amendments to the Maritime Security                payment of $5 million per vessel
                                                International Trade Impact Assessment                   Act. This rulemaking contains no new                  starting in fiscal year 2017. MSP
                                                  This rulemaking does not contain                      or amended information collection or                  payment amounts are established by
                                                standards-related activities that create                recordkeeping requirements that have                  statute. MARAD cannot adjust annual
                                                unnecessary obstacles to the foreign                    been approved or require approval by                  payment amounts without a
                                                commerce of the United States.                          OMB.                                                  corresponding legislative authorization.


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                                                                  Federal Register / Vol. 82, No. 230 / Friday, December 1, 2017 / Rules and Regulations                                        56897

                                                Nevertheless, the increased payments                       (2) on December 31, 2014, is covered               Operating Agreement from that pool of
                                                authorized by the NDAA 2016 and CAA                     by an MSP Operating Agreement under                   qualified applicants in its discretion
                                                2016 are included in the final rule.                    46 U.S.C. chapter 531.                                according to the procedures of
                                                  Two commenters critiqued MARAD’s                      *      *    *     *     *                             paragraph (a) of this section, subject to
                                                administration of the MSP and made                         Section 2 Citizen means a United                   approval of the Secretary of Defense.
                                                recommendations that would require                      States citizen within the meaning of 46               MARAD and USTRANSCOM may
                                                significant amendments to our                           U.S.C. 50501, without regard to any                   decide to open a new round of
                                                regulations. These recommendations are                  statute that ‘‘deems’’ a vessel to be                 applications. MARAD shall provide
                                                beyond the scope of the current                         owned and operated by a United States                 written reasons for denying
                                                rulemaking implementing the NDAA                        citizen within the meaning of 46 U.S.C.               applications. In as much as MSP
                                                2013, but will be considered in the                     50501.                                                furthers a public purpose and MARAD
                                                event of a future rulemaking.                           *      *    *     *     *                             does not acquire goods or services
                                                                                                                                                              through MSP, the selection process for
                                                List of Subjects in 46 CFR Part 296                     ■ 3. Amend § 296.11 by revising
                                                                                                                                                              award of MSP Operating Agreements
                                                                                                        paragraph (a)(3) to read as follows:                  does not constitute an acquisition
                                                  Assistance payments, Maritime
                                                carriers, Reporting and recordkeeping                   § 296.11    Vessel requirements.                      process subject to any procurement law
                                                requirements.                                             (a) * * *                                           or the Federal Acquisition Regulations.
                                                  For the reasons set out in the                          (3) The vessel is self-propelled and—               ■ 6. Revise § 296.30 to read as follows:
                                                preamble, the Maritime Administration                     (i) Is a tank vessel that is 10 years of
                                                                                                                                                              § 296.30   General conditions.
                                                amends 46 CFR part 296 as follows:                      age or less on the date the vessel is
                                                                                                        included in the Fleet; or                               (a) Approval. The Secretary, in
                                                PART 296—MARITIME SECURITY                                (ii) Is any other type of vessel that is            conjunction with the Secretary of
                                                PROGRAM (MSP)                                           15 years of age or less on the date the               Defense, may approve applications to
                                                                                                        vessel is included in the Fleet;                      enter into a MSP Operating Agreement
                                                ■  1. The authority citation for part 296               *      *     *    *      *                            and make MSP Payments with respect
                                                is revised to read as follows:                                                                                to vessels that are determined by the
                                                                                                        §§ 296.21, 296.22, 296.23       [Removed and          Secretary to be commercially viable and
                                                  Authority: Pub. L. 108–136, Pub. L. 109–
                                                163, Pub. L. 112–239; 49 U.S.C. 322(a), 46
                                                                                                        reserved]                                             deemed by the Secretary of Defense to
                                                U.S.C. chapter 531, 49 CFR 1.93.                        ■ 4. Remove and reserve §§ 296.21                     be militarily useful for meeting the
                                                                                                        through 296.23.                                       sealift needs of the United States in time
                                                ■ 2. Amend § 296.2 by:                                                                                        of war or national emergencies. The
                                                                                                        ■ 5. Revise § 296.24 to read as follows:
                                                ■ a. Revising the definitions of Foreign                                                                      Secretary announced an initial award of
                                                Commerce, MSA 2003, Participating                       § 296.24 Subsequent awards of MSP                     60 MSP Operating Agreements on
                                                Fleet Vessel, and Section 2 Citizen; and                Operating Agreements.                                 January 12, 2005. In June 2014, the
                                                ■ b. Removing the definition of Lash                       (a) MARAD intends to ensure that all               Secretary extended the term of all 60
                                                Vessel.                                                 available MSP Operating Agreements                    MSP Operating Agreements through FY
                                                  The revisions to read as follows:                     are fully utilized at all times in order to           2025.
                                                                                                        maximize the benefit of the MSP.                        (b) Effective date—(1) General rule.
                                                § 296.2   Definitions.                                                                                        Unless otherwise provided, the effective
                                                                                                        Accordingly, when an MSP Operating
                                                *       *     *     *    *                              Agreement becomes available through                   date of an MSP Operating Agreement is
                                                   Foreign Commerce means a cargo                       termination by the Secretary or early                 October 1, 2005.
                                                freight service, including direct and                   termination by the MSP contractor, and                  (2) Exceptions. In the case of an
                                                relay service, operated exclusively in                  no transfer under 46 U.S.C. 53105(e) is               Eligible Vessel to be included in an MSP
                                                the foreign trade or in mixed foreign and               involved, MARAD will reissue the MSP                  Operating Agreement that is on charter
                                                domestic trade allowed under a registry                 Operating Agreement pursuant to the                   to the U.S. Government, other than a
                                                endorsement under 46 U.S.C. 12111                       following criteria:                                   charter under the provisions of an
                                                where the origination point or the                         (1) The proposed vessel shall meet the             Emergency Preparedness Agreement
                                                destination point of any cargo carried is               requirements for vessel eligibility in 46             (EPA) provided by 46 U.S.C. 53107, as
                                                the United States, regardless of whether                U.S.C. 53102(b);                                      amended, unless an earlier date is
                                                the vessel provides direct service                         (2) The applicant shall meet the vessel            requested by the applicant, the effective
                                                between the United States and a foreign                 ownership and operating requirements                  date for an MSP Operating Agreement
                                                country, or commerce or trade between                   for priority in 46 U.S.C. 53102(c); and               shall be:
                                                foreign countries.                                         (3) Priority will be assigned on the                 (i) The expiration or termination date
                                                *       *     *     *    *                              basis of vessel type established by                   of the Government charter covering the
                                                   MSA 2003 means the Maritime                          military requirements specified by the                vessel; or
                                                Security Act of 2003, as amended.                       Secretary of Defense. After                             (ii) Any earlier date on which the
                                                                                                        consideration of military requirements,               vessel is withdrawn from that charter,
                                                *       *     *     *    *
                                                                                                        priority shall be given to an applicant               but not before October 1, 2005.
                                                   Participating Fleet Vessel means a                   that is a United States citizen under                   (c) Replacement vessels. A Contractor
                                                vessel that—                                            section 50501 of this title.                          may replace an MSP vessel under an
                                                   (1) On October 1, 2015—                                 (b) MARAD shall allow an applicant                 MSP Operating Agreement with another
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                                                   (i) Meets the requirements of                        at least 30 days to submit an application             vessel that is eligible to be included in
                                                paragraph (1), (2), (3), or (4) of section              for a new MSP Operating Agreement.                    the MSP under section 296.11(a), if the
                                                53102(c) of the MSA; and                                   (c) MARAD and USTRANSCOM will                      Secretary, in conjunction with the
                                                   (ii) Is less than 20 years of age if the             determine if the applications received                Secretary of Defense, approves the
                                                vessel is a tank vessel, or is less than 25             form an adequate pool for award of a                  replacement vessel.
                                                years of age for all other vessel types;                reissued MSP Operating Agreement. If                    (d) Termination by the Secretary. If
                                                and                                                     so, MARAD will award a reissued MSP                   the Contractor materially fails to comply


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                                                56898             Federal Register / Vol. 82, No. 230 / Friday, December 1, 2017 / Rules and Regulations

                                                with the terms of the MSP Operating                     provided the MSP vessel remains                       § 296.31   MSP assistance conditions.
                                                Agreement:                                              eligible.                                                (a) Term of MSP Operating
                                                   (1) The Secretary shall notify the                      (h) Release of vessels from                        Agreement. MSP Operating Agreements
                                                Contractor and provide a reasonable                     obligations. If sufficient funds are not              are authorized for 20 years, starting on
                                                opportunity for the Contractor to                       appropriated for payments under an                    October 1, 2005, and ending on
                                                comply with the MSP Operating                           MSP Operating Agreement for any fiscal                September 30, 2025, but payments to
                                                Agreement;                                              year by the 60th day of that fiscal year,             Contractors are subject to annual
                                                   (2) The Secretary shall terminate the                then—                                                 appropriations each fiscal year. MARAD
                                                MSP Operating Agreement if the                             (1) Each vessel covered by a                       may enter into MSP Operating
                                                Contractor fails to achieve such                        terminated MSP Operating Agreement is                 Agreements for a period less than the
                                                compliance; and                                         released from any further obligation                  full term authorized under the MSA
                                                   (3) Upon such termination, any funds                 under the MSP Operating Agreement;                    2003, as amended.
                                                obligated by the relevant MSP Operating                    (2) The owner and operator of a non-               *      *    *     *    *
                                                Agreement shall be available to the                     tank vessel may transfer and register the                (d) * * *
                                                Secretary to carry out the MSP.                         applicable vessel under foreign registry                 (2) Operation: Be operated exclusively
                                                   (e) Early termination by Contractor,                 deemed acceptable by the Secretary and                in the foreign commerce or in mixed
                                                generally. An MSP Operating                             the SecDef, notwithstanding 46 U.S.C.                 foreign commerce and domestic trade
                                                Agreement shall terminate on a date                     chapter 561 and 46 CFR part 221;                      allowed under a registry endorsement
                                                specified by the Contractor if the                         (3) If section 902 of the Act is                   issued under 46 U.S.C. 12111, and shall
                                                Contractor notifies the Secretary not                   applicable to a vessel that has been                  not otherwise be operated in the
                                                later than 60 days before the effective                 transferred to a foreign registry due to a            coastwise trade of the United States; and
                                                date of the proposed termination that                   terminated MSP Operating Agreement,                   *      *    *     *    *
                                                the Contractor intends to terminate the                 then that vessel is available to be
                                                                                                                                                              ■ 8. Amend § 296.32 by revising the
                                                MSP Operating Agreement. The                            requisitioned by the Secretary pursuant
                                                                                                                                                              introductory text to read as follows:
                                                Contractor shall be bound by the                        to section 902 of the Act; and
                                                provisions relating to vessel                              (4) Paragraph (h) of this section is not           § 296.32   Reporting requirements.
                                                documentation and national security                     applicable to vessels under MSP                         The Contractor shall submit to the
                                                commitments, and by its EPA for the                     Operating Agreements that have been                   Director, Office of Financial Approvals,
                                                full term, from October 1, 2005, through                terminated for any other reason.                      Maritime Administration, 2nd Floor,
                                                September 30, 2025, of the MSP                             (i) Foreign transfer of vessel. A                  West Building, 1200 New Jersey Ave.
                                                Operating Agreement.                                    Contractor may transfer a non-tank                    SE., Washington, DC 20590, one of the
                                                   (f) [Reserved]                                       vessel to a foreign registry, without                 following reports, including
                                                   (g) Non-renewal for lack of funds. If,               approval of the Secretary, if the                     management footnotes where necessary
                                                by the first day of a fiscal year, sufficient           Secretary, in conjunction with the                    to make a fair financial presentation:
                                                funds have not been appropriated under                  Secretary of Defense, determines that                 *     *    *      *    *
                                                the authority of MSA 2003, as amended,                  the contractor will provide a
                                                                                                                                                              ■ 9. Revise § 296.40 to read as follows:
                                                for that fiscal year, the Secretary will                replacement vessel:
                                                notify the Senate Committees on Armed                      (1) Of equal or greater military                   § 296.40   Billing procedures.
                                                Services and Commerce, Science, and                     capability and of a capacity that is                    Submission of voucher. For
                                                Transportation, and the House of                        equivalent or greater as measured in                  contractors operating under more than
                                                Representatives Committee on Armed                      deadweight tons, gross tons, or                       one MSP Operating Agreement, the
                                                Services, that MSP Operating                            container equivalent units, as                        contractor may submit a single monthly
                                                Agreements for which sufficient funds                   appropriate;                                          voucher applicable to all its MSP
                                                are not available will not be renewed for                  (2) That is a documented vessel under              Operating Agreements. Each voucher
                                                that fiscal year if sufficient funds are not            46 U.S.C. chapter 121 by the owner of                 submission shall include a certification
                                                appropriated by the 60th day of that                    the vessel to be placed under a foreign               that the vessel(s) for which payment is
                                                fiscal year. If only partial funding is                 registry; and                                         requested were operated in accordance
                                                appropriated by the 60th day of such                       (3) That is not more than 10 years of              with § 296.31(d) and applicable MSP
                                                fiscal year, then the Secretary, in                     age on the date of that documentation.                Operating Agreements with MARAD,
                                                consultation with the Secretary of                         (j) Transfer of MSP Operating                      and consideration shall be given to
                                                Defense, shall select the vessels to retain             Agreements. A contractor under an MSP                 reductions in amounts payable as set
                                                under MSP Operating Agreements,                         Operating Agreement may transfer the                  forth in § 296.41(b) and (c). All
                                                based on the Secretaries’ determinations                agreement (including all rights and                   submissions shall be forwarded to the
                                                of the most militarily useful and                       obligations under the MSP Operating                   Director, Office of Accounting, MAR–
                                                commercially viable vessels. In the                     Agreement) to any person that is eligible             330, Maritime Administration, 2nd
                                                event that no funds are appropriated,                   to enter into the MSP Operating                       Floor, West Building, 1200 New Jersey
                                                then all MSP Operating Agreements                       Agreement under this chapter if the                   Ave. SE., Washington, DC 20590.
                                                shall be terminated, and each Contractor                Secretary and the Secretary of Defense                Payments shall be paid and processed
                                                shall be released from its obligations                  determine that the transfer is in the best            under the terms and conditions of the
                                                under the MSP Operating Agreement.                      interests of the United States. A                     Prompt Payment Act, 31 U.S.C. 3901.
                                                Final payments under the terminated                     transaction shall not be considered a
                                                                                                                                                              ■ 10. Amend § 296.41 by revising
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                                                MSP Operating Agreements shall be                       transfer of an MSP Operating Agreement
                                                                                                                                                              paragraph (a) to read as follows:
                                                made in accordance with § 296.41. To                    if the same legal entity with the same
                                                the extent that funds are appropriated in               vessels remains the contracting party                 § 296.41   Payment procedures.
                                                a subsequent fiscal year, former MSP                    under the MSP Operating Agreement.                      (a) Amount payable. An MSP
                                                Operating Agreements may be reinstated                  ■ 7. Amend § 296.31 by revising                       Operating Agreement shall provide,
                                                if mutually acceptable to the                           paragraphs (a) and (d)(2) to read as                  subject to the availability of
                                                Administrator and the Contractor,                       follows:                                              appropriations and to the extent the


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                                                                  Federal Register / Vol. 82, No. 230 / Friday, December 1, 2017 / Rules and Regulations                                         56899

                                                MSP Operating Agreement is in effect,                   Vessel Certification form to incorporate              Rulemaking Analysis and Notices
                                                for each Agreement Vessel, an annual                    these new requirements.                                  Executive Orders 12866 (Regulatory
                                                payment equal to $2,600,000 for FY                      DATES: This final rule becomes effective              Planning and Review), 13563
                                                2006, FY 2007, FY 2008; $2,900,000 for                  on January 2, 2018.                                   (Improving Regulation and Regulatory
                                                FY 2009, FY 2010, FY 2011; $3,100,000                                                                         Review) and DOT Regulatory Policies
                                                                                                        FOR FURTHER INFORMATION CONTACT:
                                                for FY 2012, FY 2013, FY 2014, and FY                                                                         and Procedures. Under E.O. 12866 (58
                                                2015; $3,500,000 for FY 2016;                           Michael C. Pucci, Attorney Advisor,
                                                                                                        Division of Maritime Programs,                        FR 51735, October 4, 1993),
                                                $4,999,950 for FY 2017; $5,000,000 for
                                                                                                        Maritime Administration, at (202) 366–                supplemented by E.O. 13563 (76 FR
                                                FY 2018, FY 2019, and FY 2020;
                                                                                                        5320. You may send mail to Michael C.                 3821, January 18, 2011) and DOT
                                                $5,233,463 for FY 2021; and $3,700,000
                                                                                                        Pucci at Maritime Administration, 1200                policies and procedures, MARAD must
                                                for FY 2022, FY 2023, FY 2024, and FY
                                                                                                        New Jersey Avenue SE., MAR 222,                       determine whether a regulatory action is
                                                2025. This amount shall be paid in
                                                                                                        W24–214, Washington, DC 20590–0001.                   ‘‘significant,’’ and, therefore, subject to
                                                equal monthly installments at the end of
                                                                                                        You may send electronic mail to                       OMB review and the requirements of
                                                each month. The annual amount
                                                                                                        Michael.Pucci@dot.gov.                                the E.O. The Order defines ‘‘significant
                                                payable shall not be reduced except as
                                                                                                                                                              regulatory action’’ as one likely to result
                                                provided in paragraphs (b) and (c) of                   SUPPLEMENTARY INFORMATION:
                                                this section.                                                                                                 in a rule that may: (1) Have an annual
                                                                                                        Background                                            effect on the economy of $100 million
                                                *     *     *   *      *                                                                                      or more or adversely affect in a material
                                                                                                           Section 602(a) of the CGAA added
                                                Subpart G—[Removed]                                     two new exceptions to the restrictions                way the economy, a sector of the
                                                                                                        on the eligibility of vessels over 165 feet           economy, productivity, competition,
                                                ■ 11. Remove Subpart G, consisting of                   in registered length to be documented                 jobs, the environment, public health or
                                                § 296.60.                                               with fishery endorsements found at 46                 safety, or State, local, or tribal
                                                  Dated: November 28, 2017.                             U.S.C. 12113(d): (1) Replaced or rebuilt              government or communities. (2) Create
                                                                                                        vessels and (2) fish tender vessels. The              a serious inconsistency or otherwise
                                                  By Order of the Maritime Administrator.
                                                                                                        CGAA also eliminated the 15-day                       interfere with an action taken or
                                                T. Mitchell Hudson, Jr.,
                                                                                                        application deadline for vessels whose                planned by another Agency. (3)
                                                Secretary, Maritime Administration.                                                                           Materially alter the budgetary impact of
                                                [FR Doc. 2017–25898 Filed 11–30–17; 8:45 am]            fishery endorsements had become
                                                                                                        invalid. Exemptions from the large                    entitlements, grants, user fees, or loan
                                                BILLING CODE 4910–81–P
                                                                                                        fishing industry vessel restrictions are              programs or the rights and obligations of
                                                                                                        found in our regulations at 46 CFR                    recipients thereof. (4) Raise novel legal
                                                                                                        356.47.                                               or policy issues arising out of legal
                                                DEPARTMENT OF TRANSPORTATION                                                                                  mandates, the President’s priorities, or
                                                                                                           In addition, section 601(b)(2) of the
                                                Maritime Administration                                                                                       the principles set forth in the E.O.
                                                                                                        CGAA repealed section 203(g) of the
                                                                                                                                                                 MARAD has determined that this
                                                                                                        AFA, which exempted particular vessels
                                                46 CFR Part 356                                                                                               final rule is not a significant regulatory
                                                                                                        from the ownership requirements of 46
                                                                                                                                                              action under section 3(f) of Executive
                                                RIN 2133–AB86                                           U.S.C. 12113. These exempt vessels are
                                                                                                                                                              Order 12866 and, therefore, it was not
                                                                                                        currently listed in our regulations at 46
                                                                                                                                                              reviewed by the Office of Management
                                                Requirements To Document U.S.-Flag                      CFR 356.51.
                                                                                                                                                              and Budget. This rulemaking will not
                                                Fishing Industry Vessels of 100 Feet or                    Section 307 of the CGMTA (‘‘Section                result in an annual effect on the
                                                Greater in Registered Length                            307’’) added further restrictions on large            economy of $100 million or more. It is
                                                                                                        vessels under 46 U.S.C. 12113(d) by                   also not considered a major rule for
                                                AGENCY:  Maritime Administration,
                                                                                                        limiting those vessels from participating             purposes of Congressional review under
                                                Department of Transportation.
                                                                                                        in the non-AFA trawl catcher processor                Public Law 104–121. This rulemaking is
                                                ACTION: Final rule.                                     subsector.                                            also not significant under the Regulatory
                                                SUMMARY:    The Maritime Administration                    Accordingly, MARAD is updating its                 Policies and Procedures of the
                                                (‘‘MARAD’’) is amending its regulations                 regulations under 46 CFR part 356 to                  Department of Transportation (44 FR
                                                which implement new requirements                        reflect these amendments to the AFA                   11034, February 26, 1979). The costs
                                                regarding certain large fishing industry                and 46 U.S.C. 12113.                                  and overall economic impact of this
                                                vessels set forth in the American                          In addition to updating our                        rulemaking do not require further
                                                Fisheries Act of 1998 (‘‘AFA’’), as                     regulations under 46 CFR part 356,                    analysis.
                                                amended by the Coast Guard                              MARAD is revising its Large Vessel
                                                Authorization Act of 2010 (‘‘CGAA’’)                    Certificate to reflect the amendments to              Executive Order 13771 (Reducing
                                                and the Coast Guard and Maritime                        46 U.S.C. 12113. Owners of fishing                    Regulation and Controlling Regulatory
                                                Transportation Act of 2012 (‘‘CGMTA’’).                 industry vessels 165 feet or greater in               Costs)
                                                The revisions to the regulation adds two                registered length are required to submit                This rule is not an E.O. 13771
                                                new exceptions to the restrictions on the               a Large Vessel Certificate to MARAD on                regulatory action because this rule is not
                                                eligibility of vessels over 165 feet in                 an annual basis under 46 CFR 356.47(e).               significant under E.O. 12866.
                                                registered length to be documented with                 The revisions to the form include
                                                fishery endorsements, eliminates the                    provisions for the replacement and fish               Executive Order 13132 (Federalism)
                                                15-day application deadline for vessels                 tender vessels as well as a provision that              We analyzed this rulemaking in
jstallworth on DSKBBY8HB2PROD with RULES




                                                whose fishery endorsements have                         an AFA sector vessel is neither                       accordance with the principles and
                                                become invalid, limits fishery                          participating in nor eligible to                      criteria contained in Executive Order
                                                endorsement eligibility for certain large               participate in the non-AFA trawl                      13132 (‘‘Federalism’’) and have
                                                fishing industry vessels, and eliminates                catcher-processor sector.                             determined that it does not have
                                                certain exemptions for specific vessels                    Finally, MARAD is amending 46 CFR                  sufficient Federalism implications to
                                                that were deleted in the CGMTA. In                      356.47(a) to update the statutory citation            warrant the preparation of a Federalism
                                                addition, MARAD is revising its Large                   to the current code sections.                         summary impact statement. This


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Document Created: 2018-10-25 10:44:06
Document Modified: 2018-10-25 10:44:06
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesThis final rule becomes effective on January 2, 2018.
ContactWilliam G. McDonald, Director, Office of Sealift Support, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE., Washington, DC 20590. Telephone (202) 366-0688; Fax (202) 366-5904, electronic mail to [email protected]
FR Citation82 FR 56895 
RIN Number2133-AB85
CFR AssociatedAssistance Payments; Maritime Carriers and Reporting and Recordkeeping Requirements

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